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10 Must Reads for the CRE Industry Today (June 13, 2018)

Seattle abandons plans for a homelessness tax after pressure from Amazon, reports the Associated Press. Blackstone has tripled its fundraising goal for its non-traded REIT, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

Amazon Flexes Muscle, Seattle Backs Down on Business Tax “City leaders said they plan to repeal a tax on large companies such as Amazon and Starbucks as they face mounting pressure from businesses, an about-face just a month after unanimously approving the measure to help pay for efforts to combat a growing homelessness crisis. The quick surrender showed the power of Amazon to help rally opposition and aggressively push back on taxes at all levels of government, even in its affluent home city where the income gap is ever widening and lower-income workers are being priced out of housing. It has resulted in one of the highest homelessness rates in the U.S.” (Associated Press)

Blackstone Triples REIT’s Fundraising Goal “Blackstone Group LP is tripling the fundraising goal for the nontraded real-estate investment trust it launched last year, breathing new life into an industry that hit the skids about four years ago following a flurry of bad publicity. In a new registration statement filed Tuesday with the Securities and Exchange Commission, Blackstone Real Estate Income Trust said it planned to raise another $10 billion on top of the $5 billion the trust said it would raise in its initial filing.” (Wall Street Journal, subscription required)

LaSalle Hotel’s Third Largest Shareholder Backs Pebblebrook’s Offer “LaSalle Hotel Properties’ third-biggest shareholder, HG Vora Capital Management, said on Tuesday that Pebblebrook Hotel Trust’s revised offer for the U.S. hotel owner was superior to Blackstone’s $3.7 billion bid. The hedge fund, which owns a 9.1 percent stake in the LaSalle, asked the company to consider Pebblebrook's offer and said it was available to discuss its views in more detail.” (Reuters)

Bank of America to Pay $15 Million to Settle Claims That Traders Cheated Customers “Bank of America Merrill Lynch will pay over $15 million to settle claims that its traders lied about how much they paid to acquire mortgage bonds, allowing the bank to charge a higher price to clients buying securities. The sanction includes $10.5 million that must be returned to customers and a $5.2 million civil penalty, the Securities and Exchange Commission said Tuesday.” (Wall Street Journal, subscription required)

Domino’s Will Now Repair America’s Crumbling Infrastructure “Domino’s is taking American infrastructure into its own hands. The pizza chain announced on Monday that it would partner with American towns and cities to fix their potholes, ostensibly to provide a smoother ride home for takeaway pizzas. So far the company has partnered with four towns: Bartonville, Texas; Milford, Del.; Athens, Ga.; and Burbank, Calif.. The paved-over potholes are emblazoned with Domino’s logo and the company’s catchphrase, ‘Oh yes we did’.” (Fortune)

A New Workforce Demands New Real Estate Solutions “In recent years, flexible workspaces have vaulted into the popular consciousness as the exclusive domain of small, growing companies in the fields of technology or media. Close your eyes, and it’s easy to picture a scrappy team of casually dressed millennials operating out of a tiny, glass co-working office, or a sole proprietor lugging their laptop to a hot desk a few days a week. To some extent, it’s a relatively accurate conception of the marketplace for short-term and partial commercial real estate leases as it exists today.” (Forbes)

Single Family Rental REITs: Growing Pains “Powered by economic and demographic tailwinds, single family rental REITs continue to mature into a mainstream sector. Through consolidation, REITs have achieved cost efficiencies nearly on par with apartment REITs. SFR fundamentals are among the strongest in the REIT sector. 1Q18 earnings, however, were mixed. Higher-than-expected expense growth unsettled investors, but AMH and INVH affirmed full-year expense guidance.” (Seeking Alpha)

PS Business Parks Grows Mid-Atlantic Industrial Footprint “PS Business Parks Inc. has enhanced its footprint in Northern Virginia by 1.1 million square feet in one fell swoop. In a transaction valued at $143.3 million, the REIT purchased a last-mile portfolio consisting of Northern Virginia Industrial Park and Fullerton Industrial Park from MRP Realty and institutional investors advised by J.P. Morgan Asset Management. With the closing of the portfolio acquisition, PSB’s presence in Northern Virginia now consists of 5 million square feet of industrial, flex and office space.” (Commercial Property Executive)

Logan Square Theater Redevelopment in Line for TIF Subsidy “The developer overhauling the landmark Congress Theater in Logan Square is seeking $9.7 million in subsidies from the city to help pay for the $69 million project. The Chicago Community Development Commission today will consider the request for tax-increment financing for the redevelopment of the music theater at 2135 N. Milwaukee Ave., which closed in 2013. Chicago-based developer PalMet Venture plans to restore the theater, which will have 4,900 seats, and build out a 30-room hotel and 14 apartments in the 160,000-square-foot theater building, according to a report prepared for the commission.” (Crain’s Chicago Business)

Westgate Resorts Buys Vintage Manhattan Hotel “Westgate Resorts has acquired the former Hilton New York Grand Central, a 23-floor hotel on Midtown Manhattan’s East Side. The company rebranded the 300-key asset as the Westgate New York City, Westgate announced last week. Financials on the transaction were not released, and Westgate did not respond to Commercial Property Executive’s request for additional information.” (Commercial Property Executive)